thyssenkrupp titanium the and the · 2018-04-14 · dr. markus holz thyssenkrupp titanium the...
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Dr. Markus Holz ThyssenKrupp Titanium
The Global Titanium Market and the European Challenge Dr. Holz will provide an overview of the European Titanium industry as a vibrant global marketplace. His focus on industrial applications will address those major market segments where the business (plates and tube), though erratic, is mostly concentrated – power generation (strong need for construction/revamping of energy plants), PHE (booming market) and desalination (fast‐growing demand worldwide). Emphasis will be placed on the number of projects that are supplied by European fabricators. The presentation will also address military and civil aerospace ‐ where Europe is well represented by Airbus with the A400M and A380 respectively ‐ which appear a most challenging business (continuing to boom)as well as a very sensitive barometer of the world economic development that gages the excellence the titanium industry is successfully pursuing
1Dr. Markus Holz – ITA 2008
Th Gl b l Tit i M k tThe Global Titanium Market and the European Challengeand the European Challenge
Dr. Markus Holz
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Dr. Markus HolzThyssenKrupp Titanium
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
2Dr. Markus Holz – ITA 2008
The Global Titanium Market and the European Challengeand the European Challenge
Market Overview
Challenging Market Environment
Outlook and Summary
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ysse
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
3Dr. Markus Holz – ITA 2008
European Civil AerospaceTh tThreat:Declining passenger numbers caused by:
• increased taxes and fees
• record-high fuel cost
• GDP reduction in Europe
• weakening global economy
200
180
160
Relative value development of the oil price compared to aerospace
High Fuel cost grounds airplanes
weakening global economy
• noise and Co2 emissions
Production problems
Ai b A 380 18 th d lBrentöl (spot price)
DJ World Aerospace Index
120
140
100
• Airbus A 380 18 months delay
• Boeing 787 20 months delay
Possible consequences:
June 2006 June 2008
80
60
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Possible consequences:
• Airline market will be re-shaped
• Airlines could cancel or postpone orders for new aircrafts
N i i f t ti
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
• Non exercising of current options
4Dr. Markus Holz – ITA 2008
Civil Aviation Worldwide
10,000
Total per passenger-kilometer (billions)
Prognosis before
7,500
Declining passenger numbersALITALIA - 25%
OLYMPIA AIRLINES - 14%
gthe fuel price shock
Possible new scenario
5,000
IBERIA - 10%
2,500
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Source: Boeing, AEA, IATA
0 1970 1980 1990 2000 2010 2020
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: THE AIRLINE MONITOR
5Dr. Markus Holz – ITA 2008
European Civil Aerospace
Airbus Situation
No. of aircrafts
Airbus Order Portfolio as of 09/01/08
A318, A319, A320, A321: 2725
A330, A340, A350: 935
A380: 186A380: 186
Order backlog aircraft: 3846More than 5 years
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Total titanium demand: ~ 100,000 to
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: THE AIRLINE MONITOR
6Dr. Markus Holz – ITA 2008
Airbus Titanium demand according to projected airplane deliveries 2008 to 2020 (by weight / mill products)
30000
deliveries 2008 to 2020 (by weight / mill products)
It is assumed that there will be a new Airbus single aisle family beginning in
*tons
25000
30000 g y g g2018.
This has a significant impact on the titanium demand.
15000
20000
252
25128 10 11 12 13
18 20 21 23
25
10000
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200
200
2200
8200
0200
1400
2000
3700
8200
0500
1300
3800
200
0
5000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Source: THE AIRLINE MONITOR/own research
7Dr. Markus Holz – ITA 2008
Lower Titanium Consumption by AIRCRAFT Build-rate reduction
Production Planning Boeing B 787 Production Planning Airbus A 380
Short Term Difficulty B 787 and A 380 delayed – 18000 MT more material in cycle
60
706070
Production Planning Boeing B 787 Production Planning Airbus A 380
30
40
50
304050
0
1020
2007 2008 2009 2010 20110
1020
2007 2008 2009 2010 2011
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00 008 009 0 0 0
Planning 2006Pl i 2008
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A company of ThyssenKrupp
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Planning 2008Source: Boeing, Airbus, THE AIRLINE MONITOR
8Dr. Markus Holz – ITA 2008
Estimated Lower Titanium Consumption by AIRCRAFT Build-rate reduction (A380 + B787)Build-rate reduction (A380 + B787)
Titanium Demand Actual vs. Plan
Assumption of TKL-TI
[MT/Y]Ti demand planTi demand actual▲
■22.240
25.000
▲
11.7449.40815.000
20.000
Demand vs. Actual supply
▲2.044
146
1.168
0
5.000
10.000 18.900 tons Ti semis
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14602007 2008 2009
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
9Dr. Markus Holz – ITA 2008
Products that are mainly directly affected by lower Ti consumptions by aircraftTi consumptions by aircraft
INGOTS
LONG PRODUCTS
Approximately 40% of titanium
ld d dPRODUCTS world demand
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Thys
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: own calculation
10Dr. Markus Holz – ITA 2008
Industrial market still demanding
Stable growth Tube & Shell Heat Exchangers 2008 = 8.800 t 2015 = 10.400 t
Rapid growth Plate Heat Exchangers 2008 = 6.100 t 2015 = 10.400 t
Stable growth Medical 2008 = 2.200 t 2015 = 3.000 t
Rapid growth LNG Trade expected to expand Ti demand 250 t/plant4-fold till 2030 Ti demand 20 t/LNG carrierorder backlog LNG carrier: 140
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Rapid growth Nuclear Power Plants Ti demand 62 NPP in planning 2010 – 2012 = 4.000 t/year
Thys
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
p g ySource: own market research, IEA
11Dr. Markus Holz – ITA 2008
Titanium demand for liquified natural gas LNG (1)
Demand for transportation of LNG is increasing rapidly.
World gas consumption in 2007
= 2850 billion m³
Local consumption: 84 %
Transportation by pipeline: 12 %Transportation by pipeline: 12 %
Transportation by LNG tanker: 4 %
nKru
ppGas transportation <= 3200 km = pipeline
Gas transportation >= 3200 – 8000 km = LNG tanker
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: Siemens, High Performance Tube
12Dr. Markus Holz – ITA 2008
Titanium demand for liquified natural gas LNG (2)
500
600
700
00 )
LNG trade is expected to increase 4 times
100
200
300
400
2001 2010 2020 2030
P ro duct io nP ipeline tradeLN G trade
Inde
x ( 2
001
= 10
2001 2010 2020 2030
World gas consumption 2007 = 2850 billion m³
2030 = 4275 billion m³
LNG in 2007 = 4 %
LNG in 2030 = 16 %2030 = 4275 billion m LNG in 2030 = 16 %
500600700800900
capa
city
Cost reduction of LNG procedure Titanium demand for LNG
LNG plant: 250 to
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0100200300400
1995 2002 2010 2030
$/to
n LNG plant: 250 to
LNG tanker: 20 to
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: Siemens, High Performance Tube
13Dr. Markus Holz – ITA 2008
Titanium demand for nuclear power plants (NPP)
2007 = 442 NPP in operation
2007 = 28 NPP under construction2007 = 28 NPP under construction
2007 = 62 NPP in planning
Next 15 years = 160 NPP in planning
Country Under construction
Final planning Total demand
India 7 4 20China 5 5 19R i 4 1 8
Titanium demand for NPP:
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Russia 4 1 8USA 1 - 13South Africa - 1 24South Korea - 8 -
2010 – 2012 = 4000 to/year
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: Valtimet
14Dr. Markus Holz – ITA 2008
Seawater desalination I
Installed seawater desalination capacity will increase by 16% per year.
5560
Desalination: Capacity growth (world)*
Desalination capacity (mill. cbm per day)
3040 16%
Titanium demand depends on the size of the desalination plants (thermal process).
Characteristic plant capacities and titanium
20
Characteristic plant capacities and titanium requirements are:
240,000 – 270,000 m³/day drinking water output: 70 t titanium
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* Thermal processes
02006 2010
Year
g p
800,000 m³/day drinking water output: 400 t titanium
Thys
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Thermal processes
Source: own interviews/research
15Dr. Markus Holz – ITA 2008
Seawater desalination II
Demand growth in the last 70 yearsWater consumption: 6-fold increaseWorld population: 3-fold increase
Consumption of available fresh watertoday: 50%in 2025: 70%
Driving forceDriving forceRising consumption in Middle East China will become an important market for desalination plants, due to rising water demand.
800
1000
1200
1400 EuropeChina
150
200
250
300
2000025000300003500040000
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0
200
400
600
Inhabitants0
50
100
150
Water per head/day in ltr0
500010000150000000
Water consumption in million ltr/year
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: own interviews/research
16Dr. Markus Holz – ITA 2008
World Medical Market (I)
8,5 9,711
12,314,1
on $
2003 2004 2005 2006 2007
Billio
d t
2003 2004 2005 2006 2007
Medical Market by application
knee joints40%
denture20%
extremety4%
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hip joints36%
Thys
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: Zimmer
17Dr. Markus Holz – ITA 2008
World Medical Market (II)The orthopaedists use 2 2 Million different orthopaedic part of titaniumThe orthopaedists use 2,2 Million different orthopaedic part of titanium
World titanium demand by medical application in 2007
• Spinal columns 340 t 16 %p
• Denture 450 t 20 %
• Implants 1,150 t 52 %
• Surgical instruments 90 t 4 %
• Others 180 t 8 %
• Total 2,210 tAsia22%
Others3%
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Europe25%
USA50%
World Medical Market by Region
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: Smith & Nephew, Zimmer25%
18Dr. Markus Holz – ITA 2008
The Global Titanium Market and the European Challengeand the European Challenge
Market Overview
Challenging Market Environment
Outlook and Summary
nKru
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
19Dr. Markus Holz – ITA 2008
European Titanium Industry: The main challenge
• Price pressure by higher availability of more material due to aero crisisdue to aero crisis
• Projects delayed due to financial crisis of worldfinancial crisis of world economy
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
20Dr. Markus Holz – ITA 2008
Price/Cost Hysteresis of Cyclical Businesses
Price/Costs
Development
Market pricesMarket prices
+ -
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2005-2008 2008-20XX
Raw material costs
t
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
21Dr. Markus Holz – ITA 2008
Europe Terms and TradeWorldwide supply routes for titanium mill productsRussia exports mainly to the USA and Europe (=Boeing und Airbus). Japan supplies the industrial markets in Europe, China and Korea. The USA supplies the European aviation market.
pp y p
Titanium mill products: The main importers and exporters (2007)
Europe
Russia
USA9,200 t9,200 t
China
2,500 t2,500 t4,346 t4,346 t
4,500 t4,500 t
USA
Japan
Korea
4 900 t
1,600 t1,600 t
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4,900 t4,900 t
EUROPE IS THE BIGGEST NET IMPORTER OF TITANIUM MATERIAL WORLDWIDE
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp TitaniumThyssenKrupp Titanium
Source: ITA – Statistical Review 2007
22Dr. Markus Holz – ITA 2008
European Titanium Industry: Strategic Position
RussiaUSA Japan Kazakhstan UkraineChina
Production, consumption of titanium by regions (2007)Value chain, products
Titanium spongeproduction 9% 32% 5% 28% 20% 6%
9% 24% 28% 20% 14% 5%
2005
2007
32% 11% 24% 13% 20%Titanium
mill productshipments
Europe
Titanium mill product
marketsOthers
EmergingIndustr Aerospace
37% 26% 15% 14% 6% 2%
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Titaniumuser markets
y10%47% 43%
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: own research/-interviews/-calculations
23Dr. Markus Holz – ITA 2008
Europe is the 2nd scrap generator worldwide
USA
Titanium scrap production by regions (2007) Remarks
Large volumes on mill scrapand aerospace process scrap
Japan110027050
30000
Productionvolume
(1,000 tpy)Mill scrap:ingot/mill
Mill scrap:sponge/ingot
Process scrap:aerospace
Process scrap:non-aerospace
JapanMainly mill scrap due to largeexports of mill products
E
11600
1100
1405014500
20000
EuropeSmall mill scrap volumes(small mill production) butlarge aerospace process 12800
1550
1800
5450
113009800
6600
450 500700
300
9200
1230014050
10000
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scrap volume6800
650 1300 7001600 1600500 200
0USA Europe Japan Russia China Other
regions
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: AMCG-research/own calculations/-interviews
24Dr. Markus Holz – ITA 2008
Consequences for ThyssenKrupp as a major European Titanium producerEuropean Titanium producer
Using internal raw material/scrap by electron beammaterial/scrap by electron beam melting
I i dImproving downstream– Sophisticated melting
processes– New forging press– Ti dedicated plate mill– Ti optimised cold rolling line
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p g– Ti dedicated VCF– Ti optimised tube lines
Thys
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
25Dr. Markus Holz – ITA 2008
Electron beam cold hearth melting
Typical General Lay Out
Zero level
Sub level
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E-Beam distribution on the Hearth/Crucible Assembly
1
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Source: ALD
26Dr. Markus Holz – ITA 2008
EB-Furnace15 MT
Targets of Investment
15 MT
• Quasi continuous melting
• Single melting of ingot or slab in large geometrical dimensionsdimensions→ Reduction of production
steps; increase of yield
• Usage of entire variety of• Usage of entire variety of sponge to scrap raw material, depending on price
17th of March '08 first slab produced
nKru
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
27Dr. Markus Holz – ITA 2008
VCF – Vacuum Creep Flattener
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Capacity: 700 tons
Plate thickness: 3-150 mm
Inauguration: Oct. 2006
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
Inauguration: Oct. 2006
28Dr. Markus Holz – ITA 2008
ThyssenKrupp VDM -DIVISION FORGING-
40/45 MN Forging Press
YOB: 2007; SMS Meer, Germany
open die forging press
2 manipulators
4 column design (pre stressed)4 column design (pre stressed)
4 sides flat guiding system each column
daylight 4300 mm
width between columns 3125 mm
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max stroke rate 120 min-1
penetration speed 120-170 mm/s
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
29Dr. Markus Holz – ITA 2008
ThyssenKrupp Aerospace Service Center
TK Aerospace, operating from 30 service centres in 13 countries throughout the Americas, Europe and Asia Pacific, has been created to provide their customers
with
More choice
More market coverage More value for money
More options
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More optionsMore experience
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
30Dr. Markus Holz – ITA 2008
The Global Titanium Market and the European Challengeand the European Challenge
Market Overview
Challenging Market Environment
Outlook and Summary
nKru
ppTh
ysse
n
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
31Dr. Markus Holz – ITA 2008
Outlook and Summary
Reduce sponge requirements by using scrap at a maximum
Reduce dependance on imports by enlarging fabrication capacity
Verticalization of manufacturing process / increasing service
Improving performance and services to the
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Improving performance and services to the European Titanium consumer in a more
difficult market environment
Thys
sen
A company of ThyssenKrupp
StainlessThyssenKrupp Titanium
difficult market environment.
32Dr. Markus Holz – ITA 2008
All statements as to the properties or utilization of the materials and products mentioned in this presentation
are for the purpose of description onlyare for the purpose of description only.
Guarantees in respect of the existence of certainGuarantees in respect of the existence of certain properties or utilization of the material mentioned are
only valid if agreed upon in writing.
nKru
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A company of ThyssenKrupp
StainlessThyssenKrupp Titanium